China fines domestic drug firms for price fixing

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SHANGHAI (Reuters) - China’s anti-monopoly regulator has fined five domestic drug firms a total of close to 4 million yuan ($607,977) for fixing the prices of their medicines, the watchdog said on Tuesday, as the country battles to keep medicine prices down.

The drug firms colluded over a period from April 2014 to September 2015 to raise the price of allopurinol tablets, a drug used to treat gout and kidney disease, the National Development and Reform Commission (NDRC) said in statements on its website.

The fine, though relatively small, indicates China’s anti-trust watchdogs may be turning attention towards medicines, a potential headache for domestic and international firms targeting the world’s second-largest pharmaceutical market.

“(The firms) created monopolies by agreeing to raise sales prices and to artificially carve up the market,” the NDRC said in the statements. It added the drug was commonly used and was on the country’s essential drug list.

“This eliminated or restricted market competition, raising the cost of allopurinol tablets for the end user, and so harmed the interests of consumers.”

China’s near 1.4 billion potential patients are a major lure for drug firms targeting growth driven by rising incomes and a fast-ageing population. However, regulators have been clamping down on quality and forcing prices down to rein in a wider healthcare bill set to hit $1.3 trillion by 2020.

The NDRC said the firms had held several meetings with each other to negotiate and agree on fixed prices, thus violating China’s anti-monopoly law.